How To Calculate WCA In South Africa

Workers Compensation Assistance

The first Workmen’s Compensation Act (WCA) was passed in 1914. Prior to the passing of the active employees injured at work had to institute a common lawsuit against the employer for negligence.

The annual assessment fee is calculated on workers’ earnings and an assessment tariff based on the risks associated with the type of work being done. Assessment fee = total workers’ pay ÷ 100 x assessment tariff.

Assessment tariffs, reviewed annually, are based on the risks related to a particular type of work.

How is workman’s compensation calculated?

In the case of total permanent disability of an employee due to an accident in the workplace, the compensation that is offered under workmen compensation policy are:

50% of the monthly salary X relevant factor based on the age of the worker.

1,20,000 is the minimum amount payable in this situation.

How does workman’s compensation work in South Africa?

For the first 3 months off work, the employer must pay the worker compensation every month.

If the worker is off for more than 3 months, the Compensation Commissioner takes over the monthly payments, until the worker is fit for duty. Compensation for temporary disability will be paid for up to 12 months.

Who Must Pay Assessment Fees?

All employers who employ 1 or more part- or full-time workers must register with the Compensation Fund and pay annual assessment fees.

Based on Legislation in Section 80, of the Compensation for Occupational Injuries and Diseases Act

Calculation of Assessment Fees

Before 31 March each year, all employers (including contractors) must submit a statement of earnings paid to all their workers from the beginning of March to the end of February.

The annual assessment fee is calculated on workers’ earnings and an assessment tariff based on the risks associated with the type of work being done.

Based on Legislation in Section 82, of the Compensation for Occupational Injuries and Diseases Act

Formula

Assessment fee = total workers’ pay ÷ 100 x assessment tariff.

Based on legislation in Section 83, of the Compensation for Occupational Injuries and Diseases Act

Assessment Tariffs

Assessment tariffs, reviewed annually, are based on the risks related to a particular type of work.

Employers fall into one of over a hundred subclasses, each with its own assessment tariff. (See the Compensation Fund Assessment Tariffs document)

If an employer’s accident costs are higher than others in the same subclass, the assessment tariff may be increased.

If costs are lower, the rate may be reduced.

Based on Legislation in Section 85 of the Compensation for Occupational Injuries and Diseases Act

Payments

Assessment fees are payable in advance within 30 days of the date on the assessment notice sent to employers each year.